Call centre staff held over alleged fraud

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Technology research company Forrester Research fears that
business process outsourcing to call centres in India may drop by
as much as 30 percent following the arrests of 12 people for
allegedly siphoning off around $US350,000 from customers of
Citibank.

John McCarthy, vice-president of Forrester's Asia-Pacific
operations, said three former employees of Msource, the business
process outsourcing unit of Indian firm MphasiS BFL, had been
arrested in the city of Pune in Western India, along with nine
others.

The three former employees allegedly stole the money from the
accounts of four customers. McCarthy said, according to Indian
press reports, the three had obtained the customers' usernames and
passwords in the course of their work.

MphasiS' Pune operation runs a call centre for Citibank. The
customers noticed something amiss with their accounts and are said
to have notified Citibank which then tracked the activity to the
Pune centre.

MphasiS could not be contacted for comment. The company has a
listed Sydney office but the contact details are incorrect - the
phone number goes to a fax machine and the mobile number has been
transferred.

The administration manager of MphasiS head office in Bangalore
referred us to a legal official whose mobile was not
contactable.

MphasiS' office in Mumbai provided a number for a company
official, who was said to be the right person to comment. This
number, again, was uncontactable.

Citibank Australia has been contacted for comment.

McCarthy said that this incident, "along with recent onshore
disclosures of sensitive customer data, will have far-reaching
negative connotations for the offshore BPO space."

"It's a blow to MphasiS' move to focus on BPO," MCCarthy said.
"At best, this incident is going to lengthen sales cycles, slow
clients expansion of current business, and cost it new business. In
addition, Citibank is one of the firm's largest customers, and if
the bank cuts back its work with Msource, it will be a major
setback."

He said this was a clear indication that process and
certification could counter employee turnover at companies which
were outsourcing business processes.

"While the centre in Pune was BS 7799- and CMM Level
5-certified, the breach still occurred. Forrester expects that the
rising attrition rates in the call center space  50% to 100%
 undermine suppliers' ability to adhere to processes and
sufficiently check backgrounds," he said.

A number of incidents at outsourcing firms in India have raised
security fears recently. In mid-March, the main Bangalore premises
of both Infosys Technologies and Wipro were evacuated following
bomb hoaxes.

"While we are unhappy with the incident itself, we are at the
same time quite pleased that detection systems worked and that
there was swift, coordinated information exchange between the
affected parties.

"While such incidents unfortunately do happen everywhere, timely
and exemplary enforcement ensures that no one needs fear that
culprits or potential culprits can get away and the reputation and
credibility of the entire system is actually preserved and
enhanced."